dani-shay dani face dani quote

I’m looking at Alibaba going into Earnings

Danielle Shay Joins Seema Mody on Trading Nation to discuss how Chinese stocks are underperforming. Click the image above to see the full segment.

Lately, my primary trading focus has been on relative strength winners that’re benefiting from COVID-19.

One of my favorite trading setups is the rally prior to an earnings report on bullish anticipation of the actual report. Typically, I start this trade about 7-14 days prior and/or when it hits key support levels.

Last week, Amazon (AMZN) was a great example of this. Heading into earnings they rallied hard even though their actual report turned out soft. I was able to make a good trade because the anticipation was high, making the stock trade higher, but it was also due to the fact that I got out before the reports actually surfaced. This allowed me to ride the bullish run without getting burned by the less-than-perfect report.

I plan to do something similar with Alibaba (BABA).

Even though I wouldn’t necessarily want to own this long term, I love trading it short term. With its recent fall in price, it could potentially become an even better buy because you can get it on a discount going into earnings. Plus, I still think it has room to make a bullish run. E-Commerce has been particularly hot, and we’re still a few weeks away from earnings allowing it time to climb back up.

As for additional Chinese names — I like JD. I use the exact same setup on it, except I like it for a buy off of the 50 SMA, as it didn’t fall as far as Alibaba.

Click here to watch the full segment.


Want more trading education? Follow me here by signing up for my free newsletter, at www.fivestartrader.com, or in my Mastery program which you can find at www.simplertrading.com/profits. You can also follow me on Instagram, Twitter @traderdanielle, or on Facebook.

Leave a Comment

Up Next...

An effective Earnings Setup for next time

With Earnings Season coming up in the next month or so, I wanted to cover a simple, consistent setup that I use to identify potential earnings trade setups. So for this edition of Tuesday Trade, here’s an earnings trade on TMobile (TMUS)… To start off identifying a potential setup, there’s a great question to ask … Read more

Read More

Diagnosing your Trade Monster

Last week, we talked about what a Trading Monster is. To recap, a Trading Monster lives inside of you and it that takes over, distracting you from your trading plan and causing you to make foolish decisions and mistakes. These mistakes can ultimately make you lose money. So I felt it was appropriate to actually … Read more

Read More

A five-star setup in NET

A Tuesday Trade Edition: One of the most important concepts in trading is to review your work, and learn from the good and the bad. It’s critical to identify what’s working — to do more of it. Each week, you’ll get a trade from my trading journal, in which I explain my whole thought process … Read more

Read More

Subscribe Today!

Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.

Sign Up Now

Free Downloads

Squeeze Checklist

When you find a squeeze, check these boxes to see if you’re looking at a higher probability bet.

Risk Checklist

Before we can make money we must define the rules that define our risk parameters.

High Probability Plays in a Directional Market

Download Danielle's free eBook

10 Steps to Becoming a Successful Trader

Commit to becoming a successful Trader

Strategy Selection Risk Gauge

Danielle focuses on creating a constant stream of income through the selection of trend-following, directional plays.

Upcoming Appearances

Check Back for Upcoming Dates